men, and conductors and brakemen. This expense is, of course, even more independent of the volume of business than the cost of coal. No more engine men or conductors are needed for a heavy through express or freight train than for a single car tram on a branch line. And the extra cost for service of more brakemen as the size of the train increases, is relatively unimportant when modern equipment with air brakes is used. Appreciation of this fact is largely responsible for the great increase in train loads in recent years. Train-mile costs can be economized most effectively by distributing the wages of a train crew over as large a tonnage as possible of paying freight. As for the wages of station men, switch and flag men, they are largely, and often entirely, independent of the amount of business. From all these considerations, it appears that at a conservative estimate, no less than fifty per cent. of the cost of conducting transportation constitutes a fixed charge upon the property once it is in operation, irrespective of the volume of business transacted. The group of general expenses, which alone remains for analysis, is relatively small in amount. It is obvious that these outlays are a constant burden but slightly influenced by the variation in traffic. Salaries may indeed be reduced somewhat during hard times--a few clerks may be laid off; but, on the other hand, this being an expense of organization, the general staff must be maintained at about a certain standard of efficiency regardless of business. Summarizing our estimates thus far, we may reconstruct a table, distributing expenditures theoretically according as they are constant or variable in somewhat the following way: ====================================================================== | Per cent. of | Per cent. of | operating expenses | total expenses |--------------------+---------------------- | | Con- | Vari-| | Con- | Vari- | Both | stant| able | Both | stant| able --------------------------+------+------+------+------+------+-------- Maintenance of way | 20 | 13.4 | 6.6 | 15 | 10 | 5 Maintenance of equipment | 20 | 10 | 10 | 15 | 7.5 | 7.5 Conducting transportation | 56 | 28 | 28 | 40 | 20 | 20 General expenses | 4 | 4 | -- | 3 | 3 | -- |------+------+------| | | | 100 | 55.4 | 44.6 | | | Fixed charges | | | | 27 | 27 | -- | | | |------+------+-------- | | | | 100 | 67.5 | 32.5 ======================================================================